The European Central Bank, also known as ECB, recently unveiled a European service that will facilitate instantaneous electronic payments. This is an exciting, albeit necessary step for e-commerce, as consumers are often shopping online and making payments outside standard business hours. Coupled with the rise of mobile payment services, consumers now expect payments to take place instantly, rather than waiting days.
TIPS (TARGET Instant Payment Settlement) uses central bank money to settle individual payments in under 10 seconds. Surprisingly, TIPS is also very reasonably priced and has no entry or maintenance fees for account holders. For the first two years of operation, the price per initiated transaction is set at €0.002. There are also no charges for the first ten million payments settled on each TIPS account by the end of 2019.
The first instant transaction involved a client of the Spanish bank, CaixaBank, who used TIPS to make an instant payment to a client of the French bank, Natixis. Natixis garners 20% of the market share in France for electronic payments, so being part of the first instantaneous electronic payment has cemented their reputation as a major player in the payment field.
-Amanda Bierfeld, Marketing Coordinator at GT Software